Discussion on Dispute Resolution in Construction Engineering Field from a Case of Construction Contract Dispute

2019 07/02

1、Brief Introduction to the Case

The plaintiff A Construction Engineering Co.,Ltd.and the defendant B Real Estate Co.,Ltd.signed and filed a Construction Engineering Construction Contract for a certain project on May 1,2011 through the bidding process.The filing contract agreed that the dispute resolution method was"applying to an arbitration committee for arbitration".On July 20,2011,the two parties signed a separate Construction Engineering Construction Contract,The contract stipulates that the dispute resolution method is"if mediation fails,bring a lawsuit to the people's court with jurisdiction in a certain city according to law.".The two parties actually performed in accordance with the"Construction Contract for Construction Projects"signed on July 20th,2011.After the project involved in the case was completed and passed the completion acceptance,the two parties confirmed that the settlement cost was RMB 72200000 yuan.The defendant still owed the plaintiff RMB 8700000 yuan for the project,which was not paid.Repeated demands were unsuccessful.Therefore,the defendant will be informed to the People's Court of C with jurisdiction at the project location.Before the first hearing,the defendant raised an objection to the court,Considering that the case should be arbitrated by an arbitration commission in accordance with the dispute resolution method agreed upon in the filed bid winning contract,we request that the plaintiff's lawsuit be dismissed.

2、Focus issues on jurisdictional disputes in this case

In the event of any inconsistency between the arbitration jurisdiction provisions of the recorded winning contract and the court jurisdiction provisions of the subsequent actual performance contract,which contract should govern the case?

3、Attorney's opinion:

We consider the judgment thinking of jurisdiction in this case around the above issues:

Article 57 of the Contract Law stipulates that"invalidity,revocation,or termination of a contract shall not affect the validity of independently existing clauses in the contract related to dispute resolution methods."This article establishes the principle of independence of dispute resolution clauses,stipulating that the validity of dispute resolution clauses shall not be affected by the validity defects of the underlying contract.The validity of dispute resolution clauses shall be independent of other parts of the contract.The underlying contract shall not be effective,revoked,invalid Upon termination and termination,the validity of the dispute resolution clause shall not be affected.

Article 21 of the Interpretation of the Supreme People's Court on the Applicable Legal Issues in the Trial of Disputes over Construction Contracts for Construction Projects(I)stipulates that"if the substantive content of a construction project construction contract separately concluded by the parties for the same construction project is different from that of a registered winning contract,the registered winning contract shall be used as the basis for settling the project price.".Firstly,it is generally understood that the so-called"substantive content"in a construction contract should refer to terms such as project price,project quality,and construction period,while dispute resolution provisions should not fall within the category of"substantive content".Of course,even if the"substantive content"includes dispute resolution provisions,the provisions of Article 21 of the judicial interpretation only mean that when the substantive content agreed upon in the"black contract"is inconsistent with the recorded winning contract,the recorded winning contract agreement shall be used as the basis for settlement of the project price,rather than determining the rights and obligations of both parties in full accordance with the recorded winning contract.

Article 77 of the Contract Law stipulates that"the parties may modify the contract upon consensus through consultation.".In this case,if the dispute resolution provisions in the two"Construction Contracts for Construction Projects"signed successively between the plaintiff and the defendant are inconsistent,it shall be deemed that the latter contract changes the dispute resolution provisions of the previous contract,and the plaintiff and the defendant have reached a new agreement on the change in the dispute resolution method.

In this case,the two parties signed a construction contract that was actually performed after the bid winning contract was filed.Whether the construction contract signed in the future has made substantive changes to the previously recorded contract,and whether the contract itself is valid,these issues need to be reviewed and resolved in the substantive trial.The case has not been reviewed by the entity,and it is still unknown whether the two construction contracts are"black and white contracts"or whether they are normal contract changes.The defendant raised the issue of jurisdiction before the first hearing,and the first thing the court needs to deal with at this time is to determine whether it has jurisdiction over the case,which belongs to the scope of procedural review.Therefore,based on the principle of independence of dispute resolution clauses,whether the"Construction Contract"signed later is valid or not should not affect the effectiveness of the dispute resolution clauses in the contract.This case should be under the jurisdiction of the C People's Court.

4、Court decision result

The court of first instance held that the"Construction Contract for Construction Projects"signed by the plaintiff and the defendant on May 1,2011 was a contract filed by the construction administrative department.The contract agreed that the dispute resolution method was"applying to an arbitration commission for arbitration".The parties expressed their true intention to request arbitration in the event of a dispute.According to Article 119 of the Civil Procedure Law of the People's Republic of China,the case was considered not under the jurisdiction of the court,Accordingly,the plaintiff's lawsuit was dismissed.

Plaintiff A Construction Engineering Co.,Ltd.was not satisfied and filed an appeal.

The court of second instance finally held that the appellant and the respondent signed the"Construction Contract for Construction Projects"on May 1,2011,and the contract chose to apply to an arbitration institution for arbitration,which was filed with the construction administrative department.However,on July 20,2011,the two parties signed a"Construction Contract for Construction Projects",which agreed that"if mediation fails,the case shall be brought to the people's court with jurisdiction in a certain city in accordance with the law.".Article 21 of the Interpretation of the Supreme People's Court on the Application of Legal Issues in the Trial of Disputes over Construction Contracts for Construction Projects(I)stipulates that"if the substantive content of a construction project construction contract separately concluded by the parties for the same construction project is inconsistent with the registered winning contract,the registered winning contract shall be used as the basis for settling the project price.",However,this provision refers to the fact that the filing contract should be used as the basis for settlement of the project price,and does not include the content of the jurisdiction clause.The construction contract signed by both parties in the future has re agreed to bring a lawsuit to the people's court with jurisdiction in a certain city.The court of first instance,the People's Court C,has jurisdiction and orders it to hear the case.

(This article is translated by software translator for reference only.)